NEW YORK -- Oracle has reached a deal with TikTok's Chinese parent, ByteDance, which has submitted a proposal to the U.S. government just days before the Sept. 20 deadline to find a buyer for the viral-video app's American operations or be banned.
"We did get a proposal over the weekend that includes Oracle as the trusted technology partner, with Oracle making many representations for national security issues," U.S. Treasury Secretary Steven Mnuchin confirmed in a Monday interview with CNBC. "There's also a commitment to create TikTok Global as a U.S.-headquartered company with 20,000 new jobs."
"We will be reviewing that [proposal] at the CFIUS [Committee on Foreign Investment in the United States] committee this week, and then we'll be making a recommendation to the president and reviewing it with him," he said.
Oracle said Monday that it "confirms Secretary Mnuchin's statement that it is part of the proposal submitted by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider."
Oracle shares rose nearly 8% at one point in Monday's trading.
The company did not further detail its agreement with ByteDance. But a potential hurdle the deal has to clear is the tension between China's new export controls and American national security claims.
China recently announced the addition of several artificial intelligence technologies, including "personalized content recommendations based on data analysis," to its list of restricted exports. Beijing has also accused Washington of preying on "enterprises of other countries who have a competitive edge."
Asked whether TikTok's algorithm will have to be under an American company on American soil to allay U.S. concerns over national security, Mnuchin said: "I will just say from our standpoint, we'll need to make sure that the code ... is, one, secure, Americans' data is secure, that the phones are secure, and we'll be looking to have discussions with Oracle over the next few days with our technical teams."
His statements came the day after rival bidder Microsoft's revelation that ByteDance has rejected its offer.
Microsoft said Sunday that "we look forward to seeing how the service evolves" in security, privacy, online safety and combating disinformation and insisted that its proposal "would have been good for TikTok's users, while protecting national security interests."
Washington has raised concerns over the Chinese government's potential ability to access TikTok's data on American users for espionage purposes, as well as risks around the app lending its platform to Chinese disinformation campaigns. TikTok maintains that its data is not subject to Chinese law, that it would not remove content if asked to by the Chinese government, and that all data on U.S. users is stored in the U.S. and backed up in Singapore.
ByteDance has a separate U.S.-imposed deadline of Nov. 12 to unload TikTok's assets here, should Washington give the green light.